Bank of Japan Governor Kazuo Ueda reiterated on Wednesday that the central bank sees a risk of inflation exceeding its 2% target and stated it will raise interest rates further at the appropriate time, reinforcing recent messaging from policymakers.

“With the core inflation rate moving toward 2% and financial conditions remaining accommodative, we expect to continue raising interest rates and adjust the degree of monetary accommodation in accordance with economic activity, prices, and financial conditions,” Ueda said in a speech read by Deputy Governor Ryozo Himino. Ueda had been hospitalized for a liver cyst infection and only resumed work on Tuesday.

Ueda noted that the timing and pace of these adjustments would depend on the impact of the war in Iran and other factors.

These remarks align with the message conveyed at the central bank's policy meeting last week, which Ueda missed due to illness. The policy board voted 7-1 to raise the benchmark interest rate to 1%, its highest level since 1995. A summary of opinions from that meeting, released by the BOJ on Wednesday, suggested a necessity for further rate increases.

Despite the widely anticipated rate hike, the Japanese yen has received little support and remains near its lowest levels in nearly four decades. Foreign exchange traders are closely monitoring for any catalyst that might prompt authorities to intervene in the market.